Does the Contract’s “Notice Information” section have to be filled out?

QUESTION: The Q&A two weeks ago was about whether notices required or permitted under the Offer to Purchase and Contract (form 2-T) can be sent electronically.  The answer to the question was “yes.”  The Q&A pointed out that paragraph 21 of the Contract permits the use of electronic means for any notice or communication in connection with the Contract, provided that the “Notice Information” section on page 11 has been completed.

It’s not uncommon to see contracts where none of the contact information for either the parties or their agents/firms is filled in.  Is that okay?

ANSWER: No, it’s not okay.  Leaving the contact information on page 11 blank is sloppy and should be avoided.  Paragraph 21 of the Contract states that “[a]ny written notice or communication may be transmitted to any mailing address, e-mail address or fax number set forth in the “Notice Information” section” on page 11.  If no contact information for either of the parties or their agents has been filled in, it could raise a legal question as to whether a notice has been effectively sent.  For example, assume that a buyer decides to terminate the Contract on the last day of the Due Diligence Period.  The buyer agent emails a copy of a signed “Notice to Seller” (form 350-T) to the listing agent.  If the listing agent’s email address hasn’t been filled in on page 11, it could raise a legal question as to whether the Contract has been properly terminated during the Due Diligence Period since the seller arguably has not agreed that notices or communications may be transmitted to the listing agent by email.

The absence of the listing agent’s email address on page 11 is not necessarily fatal.  The Uniform Electronic Transactions Act (“UETA”) is the NC law that permits transactions to be conducted by electronic means.  UETA provides that “[w]hether the parties agree to conduct a transaction by electronic means is determined from the context and surrounding circumstances.”  If it can be established that the agents had communicated regularly with each other via email throughout the course of the transaction, an argument can be made that it was clear from the context and the surrounding circumstances that there was an implicit agreement that any written notice could be sent by email to the agents via the email addresses they had been using to communicate with each other.   However, this sort of legal argument would not be necessary at all if the agents involved had simply taken the time to fill in contact information on page 11.  Failing to do so opens the door to potential controversy.

It is a common practice for agents not to provide email addresses or other contact information for their clients because the agents do not want their clients being contacted directly by either the other agent or the other party to the transaction. That is understandable and fine.  But there is no excuse for failing to fill in contact information for the agents.

Release Date: 07/05/2016